etting company Sportech moved a step closer to selling The Football Pools after entering exclusive talks with a group of gambling industry veterans over a deal to spin off the 93-year-old business for almost £100m.
Burlywood Capital, a fund set up by Sportingbet founder Mark Blandford and former investment banker Andrew Burnett, is backing a £97.25m management buy-out that will see the iconic betting business floated on the Aim market.
A number of suitors approached Sportech, which is led by boss Ian Penrose, about buying the pools late last year, but the company has decided on a deal that ensures the game will stay in the hands of a team with detailed knowledge of the business.
The new company will be chaired by Ian Hogg, a former Sportech executive who left the company two years ago, and led by Conleth Byrne, who is currently managing director of The Football Pools and will become its chief executive.
The deal, which is dependent on the buyers raising their funds on Aim, marks a turning point in the long history of the pools, the world’s oldest football-based game that allows players to bet on the outcome of matches
The pools began in 1923, when Littlewoods started selling betting coupons outside Old Trafford, the Manchester United football ground. It was then followed by rivals Vernons in 1925 and Zetters eight years after that.
About 10 million people were playing the pools each week before the launch of the National Lottery in 1994, which hit the game hard. Sportech, which bought up the businesses and rebranded them, has since set about overhauling the game for the digital age.
The paper coupons used to play the pools, which were posted back to the operators or picked up by collectors who went door-to-door, have been replaced by the internet and direct debit payments.
There are now about 200,000 players of Sportech’s pools and the company announced at its half-year results that the division had “stabilised”, generating revenues of £14m during the first six months of the year and adjusted profits of £7m
As well as Mr Hogg and Mr Byrne, Carl Lynn, who is presently the The Football Pools’ finance chief, will also take the same role at the new Aim-listed business. Betting industry veteran Brian Mattingley, the chairman of online gambling firm 888, will join as a non-executive.
Shares in Sportech leapt as much as 12.8pc to 80¼p on news of the deal, which will leave the company focused on its tote-betting technology operations and Connecticut gambling business.